UPDATE 2-Coldwater Creek amends credit facility with Wells Fargo
(Recasts, adds analyst comment, background, updates stock activity)
By Dhanya Skariachan
BANGALORE, April 21 (Reuters) - Coldwater Creek Inc CWTR.O amended its $60-million five-year revolving credit facility with Wells Fargo Bank, allowing the women's apparel retailer to pay a smaller fixed quarterly charge for the rest of fiscal 2008.
The news of the amendment comes even as the retailer's top rival Talbots Inc TLB.N disclosed last week that two of its lenders, HSBC (HSBA.L: Cotización) and Bank of America (BAC.N: Cotización), would no longer make letters of credit available to the company.
"In light of the news from Talbots last week, this release should provide confidence in the financial condition of Coldwater Creek," CL King analyst Mark Montagna said in an e-mail to Reuters.
Coldwater Creek, which caters to mature women along with peers Chico's FAS Inc (CHS.N: Cotización) and Talbots, has been struggling due to sluggish retail trends and lackluster fashions that have translated into fewer sales at its stores.
As per the amendment, Coldwater Creek will not repurchase any of its stock prior to May 2, 2009, and will maintain liquidity of at least $30 million through April 2009.
"We view it as a positive that the company is not allowed to repurchase stock until May 2, 2009," CL King's Montagna said, adding that the move will help in alleviating investor concerns related to the retailer's financial condition.
Over the next year, there is no chance of burning through cash to repurchase the remaining $50 million of the original $75 million authorization, Montagna wrote. Continuación...